By Ross Darrell Feingold and Elizabeth Freund Larus

US Mid-term Elections: Indication of Continuity or Harbinger of Change?

In a midterm election that, like any
other, is widely seen as a referendum on the American president, the results
reveal that the US electorate is divided in its support of President Donald J. Trump
and his policies. The president’s party almost always loses seats in Congress
in midterm elections. In 1994, Bill Clinton’s Democrats lost 60 seats in the
House and Senate; in 2010 President Obama’s Democrats lost 69. As recounts in
contested races begin to settle, it appears that the Democrats will have picked
up 30-odd seats in the House, fewer than anticipated. Republicans defied
political gravity by expanding their majority in the Senate by two seats. Naturally,
President Trump referred repeatedly to a successful
election result at his post-election press conference on November 7,
2018.

As the 116th Congress convenes in January
2019, do not expect House Democrats to seek, or
even want, immediate and drastic changes in US foreign policy. Trade wars with
multiple trading partners will continue because, in the eyes of many Americans
and American politicians, major trading partners have not changed their
egregious behavior. Regardless, the execution of US trade law into actual
policy does not need Congressional approval. So, who are the winners, losers
and those facing a period of uncertainty in the US foreign policy agenda?

Those who support President Trump’s China strategy can expect
policy continuity and thus must be happy with the election result. Trump is
confident that his China trade strategy is working, describing
China tariffs in early November as “We’re doing very well the way we’re
doing it now.” Confident that the threat of even higher tariffs on more goods will
force China to negotiation a settlement favorable to the United States, Trump
has threatened to raise existing tariff rates and add duties on another USD 267
billion of Chinese goods.

Both Democrats and Republicans support a tougher stance on
Chinese trade and intellectual property practices. In recent decades as
bilateral and multilateral trade agreements proliferated, Democrats, with their
pre-Trump base of blue collar and union voters, typically had a protectionist’s
skepticism towards lowering US trade barriers. Democrat Presidents Bill Clinton
(North American Free Trade Agreement) and Barack Obama (Trans-Pacific
Partnership) had to seek Republican support for their major trade agreement
initiatives. The new Democrat House majority will not be the party of “drop the
tariffs.”

Earlier
this year, with overwhelming bi-partisan support in both the House and the Senate,
President Trump signed
into law the Foreign Investment Risk Review Modernization Act (FIRRMA),
which makes more robust the reviews previously conducted by the Committee on
Foreign Investment in the United States (CFIUS). As an illustration of the
breadth of concerns about China among US lawmakers, congressmen attending the
roundtable hosted by President Trump to discuss the new act referenced numerous
China-related concerns beyond those which FIRRMA seeks to address. With
professional advisers providing clients strategies to structure transactions so as to comply with FIRRMA, House Democrats could
even hold hearings into China investments that the Trump Administration approves.

Countries on the receiving end of Trump’s
criticism over tariff and non-tariff barriers, as well as other restrictions
that disadvantage US companies, have shown a willingness to negotiate. Examples
include South Korea, Canada and Mexico, as well as Japan. An early November
phone call with Chinese President Xi Jinping and plans for a bilateral meeting
at the upcoming G20 summit, along with an optimistic
presidential Tweet, indicate that Trump is open to a trade agreement
with China. Larry Kudlow, director of the National Economic Council, subsequently
gave the President’s remarks some context, explaining that US negotiators are
doing normal preparation but that the two sides are not
on the cusp of a deal. Yet in the week after the election, China
reportedly sent the Trump Administration a written
trade proposal. There is one caveat, however: Having taken the
House, Democrats could look into such issues as
the 18 trademarks that China has granted
in recent months to companies linked to Mr. Trump and his
daughter Ivanka and whether they reflect conflicts of interest. China says it
handles all trademark applications equally, but House committees could probe
whether Beijing has exploited the Trump family’s substantial intellectual
property holdings in China for political or diplomatic advantage.

Within a week of the
election, the bi-partisan US-China Economic and Security Review Commission
issued its annual report with a range of recommendations to respond to China’s trade, military,
sanctions enforcement and other policies. Many of the commission’s
recommendations in its 2017
report resulted in legislation or executive branch actions and this
year’s report forms a basis for House-Senate cooperation on China issues in
2019. Also in the week after the election, the bi-partisan National Defense
Strategy Commission issued its assessment of the 2018 National Defense Strategy, which included detailed analyses of
scenarios involving war with China as well as North Korea. Combined with large US
military exercises
with Japan simultaneous to the US mid-term elections, the security
agenda’s focus on China remains unchanged regardless of the election result.

The post mid-term attention on Asia bodes well for the US
presence in the Indo-Pacific and occurs even without President Trump’s attendance at the East Asia and APEC summits.

As tension throughout 2017
shifted in 2018 to the historic Trump-Kim summit and, for the time being, a
pause in North Korea’s provocative nuclear and missile actions, Congressional
Democrats struggled to respond. From pre-summit accusations that Kim Jong-un
had a giggle
fit at US expense, and post-summit responses that Trump was in a haste
to reach an agreement in Singapore (notwithstanding that no
agreements were reached), Congressional Democrats watched with frustration as
President Trump achieved what President Obama had failed to do. With reports
after the mid-term election that North Korea continues
to operate undeclared ballistic missile bases, Secretary of State Mike
Pompeo can expect aggressive questions from House Democrats about the status of
denuclearization progress, especially if there is a second summit. In anticipation
of this, within days of the mid-term election, Trump Administration officials
have been clear in publicly
explaining the pre-conditions for a second summit, and announced
jointly with Japan additional
North Korea sanctions.

Tension in Korea during
the first two years of the Trump presidency was not limited to North Korea’s
nuclear and missile programs. South Korea was both an early target of President
Trump’s trade policies, and an early example of a country that offered
concessions through revisions to the Korea-United States Free Trade Agreement (KORUS).
Congress’ role in the KORUS amendment
process will be limited, due to the technical nature of the
amendments.

Vice President Mike Pence’s
post-election visit to Asia has re-energized the on-again, off-again efforts to
create cohesive trade and security policies among the Australia, India, Japan,
and US “Quad”. A detailed statement issued during Pence’s post-election visit to Tokyo outlines plans for joint
infrastructure investment efforts in Asia, and was followed by a Quad leaders
meeting on the sidelines of the ASEAN (Association of Southeast Asian Nations)
summit that increases the likelihood of the Quad’s resurgence.
Prime Minister Narendra Modi and Prime Minister Shinzo Abe have enjoyed
positive relations with President Trump, and the conservative policies of
Australia’s Scott Morrison make him a natural ally as well. Public-private
partnerships to expand opportunities in Asia for US infrastructure companies
create jobs and exports in the United States, and it’s likely House Democrats will
be supportive, especially if it proves impossible to pass a domestic
infrastructure spending bill.

Despite criticism that the Trump Administration unevenly sanctions human rights violators and
questions about the sanctions’ efficacy, the Trump Administration has relied
heavily on sanctions — such as
those available under the Global Magnitsky Act — to impose penalties on human
rights violators. Post mid-term election, there are already signs of a more
robust human rights and religious freedom agenda, which will be yet another
issue that attracts bipartisan support. Upon Congress’ return to Washington
D.C. after the mid-term election, Florida’s Republican Senator Marco Rubio, an
outspoken monitor of human rights issues in China and Hong Kong, introduced
a bill with bipartisan support to condemn human rights violations in
Xinjiang. In his meeting with Aung San Suu Kyi at the ASEAN summit, Vice
President Pence delivered the Trump administration’s most high-profile criticism to date of the
persecution of Rohingya Muslims in Myanmar. Pence also repeatedly asked Suu Kyi
to pardon two imprisoned Reuters journalists.

Democrats were critical
of Trump’s first Secretary of State Rex Tillerson’s moves to reduce staffing
levels, and will welcome Pompeo’s efforts to resolve unfilled State Department
positions in Washington D.C. and overseas including in Asia. If Secretary of
Defense Jim Mattis resigns, Pompeo’s role in national security policy will be
further strengthened. For stakeholders such as foreign governments or
non-governmental organizations that lack a relationship with incoming committee
chairmen and staff, there is no time to delay establishing such relationships.
In the Senate, Idaho Republican James Risch is expected to replace the retired
Tennessee Republican Bob Corker as Senate Foreign Affairs chairman; Risch is
already active on China and Taiwan issues. In the House, Foreign Affairs Committee
chairman Ed Royce, well known for his support of Taiwan, has retired. If
ranking Democrat Elliot Engel of New York becomes committee chair, for Asia
policy he is a bit of an unknown quantity; his website’s foreign policy section lists
no Asia issues. The Armed Services committees in both the Senate and
House face significant
turnover, though partisan differences on issues such as nuclear
weapons research are unlikely to impact bipartisan support for an expanded US
military presence in the Indo-Pacific.

The post mid-term
attention on Asia bodes well for the US presence in the Indo-Pacific and occurs
even without President Trump’s attendance at the East Asia and APEC summits. This contrasts
sharply with Europe, where worries about the pre-election decision to withdraw from the Intermediate-range Nuclear
Forces Treaty, a fractious
post mid-term phone call with United Kingdom Prime Minister Theresa
May, and a contentious visit to France followed by presidential tweets
critical of France’s trade policies indicate changing US priorities.
With the Trump-Xi meeting at the G20 expected to cover a wider range of issues
than Trump’s meeting
with Vladimir Putin, Asia might indeed be a winner from this mid-term
election.

About The Author

Ross Darrell
Feingold is a political risk consultant and lawyer based in Taiwan. He is a director of business development at SafePro Group, a global security and protection specialist firm. He can be
contacted on Twitter at @rossfeingold and he can also be contacted on Facebook:
https://www.facebook.com/ross.feingold and LinkedIn: https://ca.linkedin.com/in/ross-feingold-方恩格-62823

Elizabeth
Freund Larus is a scholar and the president of E Larus Consulting based in
Virginia. She is the author of Politics and Society in Contemporary
China, and regularly comments on security issues in the Asia-Pacific.